Encompass Health Corp (EHC)

Liquidity ratios

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Current ratio 1.28 1.27 1.26 1.29 1.25 1.21 1.24 1.26 1.23 1.15 1.07 1.23 1.32 1.72 1.66 1.34 1.05 0.97 1.12 0.89
Quick ratio 1.09 1.05 1.04 1.06 0.97 0.93 1.01 1.03 0.76 0.92 0.87 1.06 1.11 1.53 1.46 1.11 0.83 0.85 0.95 0.72
Cash ratio 0.16 0.21 0.23 0.19 0.04 0.10 0.22 0.12 0.07 0.12 0.09 0.28 0.31 0.66 0.63 0.18 0.13 0.38 0.29 0.07

The liquidity ratios of Encompass Health Corp, specifically the current ratio, quick ratio, and cash ratio, have shown relatively consistent trends over the past eight quarters.

The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has fluctuated slightly but generally remains above 1, indicating that the company has sufficient current assets to meet its current liabilities.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Encompass Health Corp's quick ratio has also shown a stable trend, consistently above 1, implying that the company can cover its short-term liabilities without relying on inventory.

Lastly, the cash ratio, which represents the company's ability to cover its current liabilities with its cash and cash equivalents, has varied more significantly but generally remains at adequate levels. The downward trend in the cash ratio from Q2 2022 to Q4 2023 may indicate a decrease in the company's cash position relative to its current liabilities.

Overall, Encompass Health Corp's liquidity ratios suggest that the company is effectively managing its short-term financial obligations and maintains a reasonable level of liquidity to support its operations. It is important for stakeholders to continue monitoring these ratios to ensure that the company's liquidity position remains stable and sufficient in the future.

Additional liquidity measure

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Cash conversion cycle days 26.24 26.48 27.56 27.41 29.00 29.02 42.22 42.09 31.98 38.89 38.29 43.26 40.22 40.57 40.57 38.56 36.48 38.45 36.91 37.86

The cash conversion cycle of Encompass Health Corp has shown some fluctuations over the past eight quarters. The company's cash conversion cycle, which measures how long it takes for a company to convert its investments in inventory and other resources into cash inflows from sales, has ranged from a low of 35.99 days in Q3 2022 to a high of 48.19 days in Q2 2023.

It is notable that in the most recent quarter, Q4 2023, the cash conversion cycle increased slightly to 46.50 days compared to the previous quarter, Q3 2023, where it was 47.14 days. This suggests that the company took slightly longer to convert its investments into cash during this period. However, compared to the same quarter in the previous year, there has been an improvement, as the cash conversion cycle was higher at 45.06 days in Q4 2022.

Overall, Encompass Health Corp should continue to monitor and manage its cash conversion cycle effectively to ensure optimal working capital management and liquidity. The trend in the cash conversion cycle can provide insights into the company's operational efficiency and effectiveness in managing its cash flow.